labelling machine

Should You Buy Or Lease A Labelling Machine?

If you’re in the business of labelling volumes of product for outbound orders or incoming shipment, a labelling machine can be greatly beneficial in your warehouse or distribution centre processing.

Having to deal with repetitive productivity in high numbers can prove costly in efficiency and performance. Leasing or buying an automated machine from the label applicator machine range is the most cost-effective solution.

It’s estimated that up to 85% of SMEs lease equipment, like print and apply label machines. Your business situation will obviously dictate, whether leasing or buying is the best option for you.

LEASING

Leasing a labelling machine offers the flexibility to upgrade to new technology, as your business needs change. This option also frees up capital for other purposes.

The Advantages:

Leasing allows you to acquire equipment without having to spend substantial capital upfront. The payable deposit is rarely large.

The full lease payment is deductable as an annual tax return business expense.

Leases are usually easier to obtain than a loan, for the purchase of equipment for your business. The monthly leasing payments are also generally smaller than loan repayments.

The on-going advancements in manufacturing technology can reduce a piece of equipment to virtually obsolete in no time at all. Leasing enables you to upgrade to the latest equipment, instead of being stuck with an outdated model.

The Disadvantages:

Although you’re saving money upfront, the overall cost of leasing may be more costly in the long run. This could make the expenditure higher than buying the equipment outright.

You must continue to make regular payments throughout the term of the lease, regardless of whether or not you use the equipment. In some cases, it may be possible to cancel the lease, but a termination fee will usually apply.

Your business expense does not allow you to claim a depreciation deduction on your tax return.

BUYING

If you can afford the high initial investment required, the ownership of an advanced labelling machine, or other equipment, can be very appealing for a business owner.

The Advantages:

Gaining ownership is the primary reason why many people prefer to invest in equipment.

You may be able to receive tax savings through depreciation deductions. However, not all equipment purchases are eligible.

The Disadvantages:

Even with financing, the substantial cash outlay required to purchase equipment outright may still be too high. You will also have to factor in the down payment that s required on a loan.

Equipment that is high-tech runs the risk of becoming technologically obsolete long before you had planned to reinvest in upgrading your equipment.

To Buy Or To Lease?

To work out which option is best for you, consider the following:

  • How long do you plan to keep the labelling machine?
  • How soon is it likely to become outdated?
  • What are your financing options?
  • What are the tax benefits?